Alcoa's stock rose 6 cents to $9.19 in after-hours trading on the New York Stock Exchange.

The company posted a net loss of $143 million, or 13 cents per share, compared with a profit of $172 million, or 15 cents per share, in the same quarter last year, the Pittsburgh-based company said on Tuesday.

But adjusted for $175 million of certain items, including environmental remediation and the settlement of civil litigation, the company reported a profit of 3 cents per share. On that basis, it exceeded analyst estimates for a break-even quarter, according to Thomson Reuters I/B/E/S.

Revenue fell 9 percent to $5.8 billion, as a result of a 17 percent drop in aluminum prices from the same quarter a year ago, said Alcoa, which is traditionally the first S&P500 company to report quarterly earnings.

"It's a headline beat," said analyst Kuni Chen, of CRT Capital. "It looks like the tone of the quarter was slightly better-than-expected, particularly in the downstream business."

Chairman and Chief Executive Officer Klaus Kleinfeld reaffirmed Alcoa's long-term outlook for aluminum, which is used for construction, auto and aviation manufacture, and beverage cans. He expects global demand to double between 2010 and 2020.

He acknowledged there is still a lot of uncertainty, but said markets are showing signs of some positive growth.

"Markets seem to be driven more by headlines than fundamentals right now, but Alcoa remains focused on the things within our control", Kleinfeld said.

"We're capitalizing on pockets of strong growth and achieving record profitability in our mid and downstream businesses." <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Alcoa in Q3: In the third quarter, Alcoa's share price

underperformed aluminum, the materials sector, and the wider

market.

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Special items in the third quarter included reserves for environmental remediation, and uninsured losses related to a fire at Alcoa's Massena, New York smelter.

Also, there was a charge of $40 million for settlement of a civil suit brought by Aluminum Bahrain . Without admitting any liability, Alcoa agreed to make a cash payment to Alba of $85 million payable in two installments. It will also supply Alba with raw materials under long-term contracts.

The price of aluminum was hovering around two-year lows earlier this year, and ended the third quarter at $2,112 per tonne - about 14 percent lower than in the third quarter of 2011.

While its downstream businesses have performed well, Alcoa faces big challenges in its core businesses of mining bauxite and producing aluminum. Demand is strong in aerospace and transport, but other sectors, such as construction, have not recovered from the recession and over-supply in the industry has kept prices low.

Alcoa recently closed its aluminum smelter on the Italian island of Sardinia and put it up for sale, citing high power prices that made the operation uncompetitive.

Last week, Dahlman Rose & Co analyst Tony Rizzuto cut his rating on Alcoa shares to "hold" from "buy" because of weak aluminum prices. "We haven't seen signs of any fundamental changes that should provide support for a meaningful move higher," he wrote.